Distributors discuss how value-added product and service solutions impact sales approaches.
Offering customers the very best is not a new concept for industry sales professionals. They will tell you that this has always been their mission. But just as technology and a progressive marketplace have changed the way business is conducted, so have they changed the way salespeople approach their customers.
Today, these professionals use contemporary marketing terms and their thinking has become more proactive than reactive.
This is mainly because product and service solutions are far more sophisticated; they are value-added. This requires manufacturers to educate their distributor partners who, in turn, enlighten customers.
As a result, customers are seeing the services distributors have always provided in a newer, brighter light.
Here, three distributors discuss how to-day's super-performing products add value throughout the supply chain. They are:
- John Conelias, president, Shoreline Business Forms, Wallingford, Conn.
- Jack Schachtel, president, CTP Solutions, Aboura Hills, Calif.
- Glenn Martin, Control Printing Group, Independence, Mo.
1. In your opinion, how important is the concept of added value in counteracting declining markets?
Conelias: We started out strictly as a forms broker, but now a lot of our business has to do with plastic cards. Adding value in the card business has become very important.
We deal only with banks and credit unions for all the forms we distribute. In fact, we're not just a straight distributor anymore. We have a coding and embossing facility in Rhode Island that handles card personalization services—one example of how to add value to a product.
Schachtel: Added value has been a way of life for us since we opened our doors in 1991. It lets us differentiate ourselves from the competition. Although the concept has always been around, that specific term was not so prevalent in the past. Back then we referred to value-added products as "unique solutions."
Martin: I started hearing the phrase being used in the early 90s. Value-added products have absolutely helped us to generate more profits and compensate for lost sales volume in declining markets.
2. How has this concept impacted your sales approach?
Conelias: In the past few years, we've introduced a great deal of debit card programs. This involved marrying marketing and the forms business to make these programs successful.
While many times our competition just gives the bank a card in a carrier that will be mailed to the end-user, we customize the card by adding a tie-back envelope, an EFT agreement, an identity-theft brochure and a welcome letter. That's where all the added value comes in.
If you go into a small-scale bank or credit union, a generic start-up program may be worth $5,000, but by the time we're done adding value, shadings and colors to the package, its worth has increased to about $15,000.
Schachtel: The bulk of value-added selling for us is in outsourcing, printing and mailing services. Initially, we just sold customers the forms and they did the mailing. But eventually, we picked up that piece as well by conducting sales presentations to educate them regarding the cost efficiency benefits of outsourcing. Such efficiency can be seen in a feature like per-piece pricing.
Customers already understand the mailing process and the aggravation they go through to handle it themselves. We just need to explain how the outsourcing process gets their projects in the mail and, at the same time discuss the security measures that will protect their databases. We look for customers with high monthly volume. Many are in service or distribution industries, but others have quarterly as well as on-demand needs.
Martin: As we started using the term "value-added" with customers, they perceived that we were doing more for them and spending more time with them. Even though it's the same service we have been giving all along, the term just packages it differently and enhances the interaction in the customers' eyes. Value-added selling has made us conscious of products that were once foreign to us and allows us to show customers that we're more innovative.
3. Give examples of product modifications or re-designs that increased value to the customer and the profit margin for the company.
Conelias: Recently we re-designed an identity-theft brochure and our customer liked it so much, it decided to not only mail it initially with the card itself, but to also stock it in its lobbies and use it as a statement stuffer every month.
As a result, our client is hitting the end-user three times with the same brochure about protecting privacy.
Martin: A customer with a pick-and-pack operation was using a perforated continuous form and and attaching it to boxes with some adhesive. It was a tedious process and the forms often ripped. We provided an integrated label that worked great for this application.
Another customer was putting envelopes inside of a catalog for ordering. We created a bar-coded form that simulated an envelope and personalized each one with a customer's name and account number from the database. It was hugely successful for them, and the benefits of a more streamlined system that increased accuracy were immediately obvious.
4. From whom do you seek input when attempting to enhance one of your products?
Martin: A manufacturer introduced the integrated label to us and we thought it would do a good job for the pick-and-pack customer. It was more expensive, but certainly more efficient.
We conducted a time study with the customer and that was all that was needed to double check the products effectiveness.
Conelias: Many times we work with our customers' marketing departments to design the whole card package.
5. Did you have to correct any initial design problems to make a product functional?
Conelias: Translucent cards are very popular right now. However, from the front of a see-through card, items like the signature panel and hologram appear backwards. The question we had to ask ourselves in the redesign was, "How can we lay out a translucent card and still meet Visa and MasterCard standards?"
To resolve this issue, we used different solid shading on the bottom where the signature panel is and in the middle where the hologram is, so the card still has translucent areas, but these important elements don't show through.
Schachtel: The industry itself is inherently a "problem industry." The only recourse is to identify the problems and outline corrective measures.
6. Are there particular products you're educating customers about to promote the value-added concept?
Schachtel: Great new products are always coming in. With gimmicky products like electronics, the question is always, "how will the customer perceive it?" The product may seem very valuable, but it has yet to be proven. A service like print-to-mail is easier for them to conceptualize—the customer will still receive the same piece of mail, just through a different route. It's the difference between a company culture change and a functional change.
Martin: We're seeing some exciting specialty items like plastic cards. We hope to get a group of customers involved and offer the cards as marketing tools through a team-selling approach.
7. Have you done any reading, research or attended educational seminars about adding value to products as a way to increase profit margins while also better serving the customer?
Conelias: We read the industry trade magazines to get ideas for different products that could accompany the card.
Schachtel: With 11 seasoned sales reps here, the focus is not so much on sales training as it is new product orientation.
Martin: We have little formal training here and I'm not attending a lot of trade shows, but manufacturers frequently come in to talk to us about their new products.
By Maggie DeWitt and Jennifer Hans
- Companies:
- Control Printing Group
- CTP Solutions
- People:
- Glenn Martin